NEWPORT BEACH, CA-Buchanan Street Partners and the California Public Employees Retirement System, CalPers, have increased their capital commitment to Buchanan Urban Investors by $40 million.
The new investment brings total committed funds to more than $100 million for the fund, which will capitalize between $350 million and $500 million in projects when the new funds and previous commitments are combined.
CalPers and Newport Beach-based Buchanan formed Buchanan Urban Investors in October 2001 to fund what they describe as “value-added redevelopment and new construction opportunities in urban locations” throughout California as a way of advancing housing and job growth in those areas. Among BUI’s investments to date are the acquisition of the Mall of Orange in Orange, Calif., Serramonte Plaza in Daly City, and several apartment complexes. Most recently Buchanan Street provided $8.5 million in mezzanine debt to recapitalize Devonshire Reseda Shopping Center, a 182,300-sf grocery-anchored retail center in Northridge, Calif.
Tim Ballard, chief investment officer at Buchanan, says BUI expects to invest in infill developments that equity or mezzanine debt in the range of $3 million to $16 million range to capitalize projects valued between $10 million to $75 million.
Buchanan Street Partners was one of four real estate investment partners that CalPers chose in June 2001 to invest $200 million in the development of urban infill real estate projects in California, a move designed to diversify the pension fund’s real estate portfolio while helping to meet the housing shortage in the state’s cities.
The four investment firms focus on developing and redeveloping apartments, single-family homes, industrial, office and mix-used properties.
CalPers is the nation’s largest public pension fund with assets totaling more than $143 billion. It provides retirement and health benefits to 1.3 million public employees and their families.